IMO the important thing is branding. Luxury comes at a price, a status symbol. Benz, BMW, Jaguar, Land Rover want to maintain that image. These companies want to sell cars, but, not a huge volume on their high end cars, rather have higher margins on them.
So there are 2 reasons for the higher price of these cars in India:
1. Higher taxes since they are imported.
2. Luxury image - branding, status.
Cheers
Nattusbs
Note: I actually own a Benz and a Land Rover here in southern California
